Just as digital transformation required all companies to become technology companies, now all companies must move quickly to become sustainable. And, once again, technology has a leading role in this evolution.
It’s a reality confirmed by Accenture’s latest sustainable technology survey, which is based on input from 560 companies with revenues of more than US$1 billion worldwide. All respondents ranked technology as critical to achieving their sustainability goals.
Digging deeper, we see why technology is moving front and center on the sustainability agenda. Companies that heavily adopt sustainable technology achieve 4% higher environmental, social and governance (ESG) scores from Arabesque S-Ray (a global specialist in measuring ESG metrics). And this can raise your overall ESG rating by 11%.
Technology-driven sustainability is not only good, it’s also good business. Accenture analysis shows that companies with consistently high ESG performance generate 2.6 times more shareholder value than companies with average ESG performance.
It is clear that there is much to gain from a holistic sustainable technology strategy. But while most companies are aware of the benefits, they are still a long way from realizing them. In fact, only 7% of companies have fully integrated their technology and sustainability strategies.
What stops organizations?
Some companies are still struggling to figure out the ESG impact of their existing technologies and how to improve it. Overall, there are some common challenges that companies face in moving their sustainable technology strategies from ambition to reality:
- Lack of solutions and standards: 40% of executives surveyed believe the right solutions are not available or mature enough, including the availability of the right talent to lead these initiatives.
- Complexity: Nearly 33% are struggling with solution complexity or making their legacy systems sustainable
- Lack of awareness: Around 20% are not aware of the unintended consequences of the technology or whether the technology they use is sustainable.
Another big barrier: CIOs don’t always have a seat at the sustainability decision table. Although technology is becoming the center of executives’ sustainability agendas, the role of most CIOs has not evolved in line with this change. Only 49% are on the leadership team that sets sustainability goals, and only 45% are evaluated on achieving these goals.
Three keys to a sustainable technology strategy
To truly realize value, organizations must bridge the gap between their technology and sustainability strategies, and CIOs have a crucial role to play in driving this change. They can help drive both business growth and ESG performance with an integrated sustainable technology strategy that is built on three key elements:
- Sustainability by technology: use technological innovation to enable sustainability initiatives
- Sustainability in technology: measure the ESG impacts of technology and work to ensure it is designed, developed and deployed in a sustainable manner
- Sustainability at scale: engage the entire ecosystem of businesses, nonprofits, and governments to make an impact beyond the business and around the world
Ranking of our respondents
As part of its report, Accenture developed a sustainable technology index, which rates performance against these three elements on a scale of 0-1. Interestingly, it revealed a “medium crowded” around the mean score of 0.45. Approximately 60% of the companies published scores within the range of 0.3 to 0.5. This indicates that most organizations still have a long way to go to achieve all three elements of a sustainable technology strategy.
Better performance = higher profits
Those companies that strive to achieve real value. It’s clear that the higher a company’s score on the sustainable technology index, the more likely it is to see improvements across a range of KPIs. These include increased financial performance, innovation, customer experience, recruitability, software quality, and ESG goals.
Around half of all respondents reported that they are already seeing returns on their sustainable technology investments in at least one of these categories. It’s a promising start, but it’s worth noting that very few companies currently realize multiple business benefits across the spectrum, which is where the full value of a sustainable technology strategy lies.
To put it bluntly, if average performers on that green tech index moved into the top group, they would be 21% more likely to reap at least five benefits. That presents a strong case for an integrated sustainable technology strategy. And those CIOs who are up for the challenge will drive new sources of value for their business, while lighting their way to a more sustainable future.